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Another UK Company Bought Out to Foreign Company: Schneider Electric Buys the Remaining Shares of Aveva

There has already been a takeover of several of the largest UK tech businesses, including Avast, Micro Focus, Dark Trace, and, most recently, Aveva. The British government has been trying to protect the remaining UK tech companies from foreigners but doesn’t seem to have blocked this recent deal.

Schneider Electrical, a French-based industrial, has acquired all outstanding shares in the UK’s Aveva for more than $10 billion. It is a record deal for the French-based company, which is expanding its international business. The deal will be officially completed next year, and a transition plan has been implemented to facilitate this transition within the company.

Schneider reportedly stated that they have consented with Aveva, their parent company with headquarters in the UK, to finish their acquisition of all of Aveva’s shares. Initially, the French industrial conglomerate owned 60% of the British engineering and industrial software company. Just like tech businesses, casino companies such as Dr Bet casino are also likely to face common challenges in 2022.

Schneider Electric is a world-renowned company with a significant presence across Europe and beyond. Schneider has been the largest shareholder of Aveva shares since 2018. It all started when Aveva agreed to merge with Schneider’s industrial software division. The shares were held by an indirect wholly owned subsidiary of Schneider’s Samos Acquisition Company. The recent 2022 deal ensured that Ascot Acquisition Holdings acquired the remaining outstanding shares.

The Schneider move is to improve the customer’s operation and deliver improvements. It will help ensure sustainability by efficiently reducing energy, carbon and resource intensity.

The Aveva-Schneider deal doesn’t seem to be stopped since Aveva has reviewed the offer with its board members and recommends that the shareholders accept it. When at least 75 percent of Aveva shareholders accept the offer, the acquisition will be effective in early 2023.

“Most companies are increasingly turning to industrial software.” With this claim, Aveva has made a move for complete ownership by Schneider Electric to ensure efficiency and sustainability in executing customer propositions.

Schneider Electric’s acquisition of Aveva has prompted a lot of hot debate in the UK. But what are the reasons behind these discussions?

Analyst Megabuyte sees this agreement as a big blow to the UK public markets. This is because Schneider only aims at making Aveva a standalone global operation based in Cambridge, UK. Schneider plans to transit Aveva’s portfolio to a subscription and SaaS model, expanding its R&D presence.

Megabuyte adds that the pool of large and well-established software firms in the UK is negligible. Aveva has been one of the most successful software companies in the UK and has significantly contributed to the growth of the UK economy for the past decades. By Schneider taking over, it will negatively affect the economy of the UK.
There has been a relative fall in the value of the British pound relative to other currencies. Most industry observers warn that other UK tech companies are under the threat of acquisition, particularly by US-based investors.

Trachet, a business advisory outfit, says that the gaze has been turned towards the UK by the private equity firms. This is because low valuations have made it possible to acquire UK companies at a “discounted” price. Now that the Sterling is less strong, purchasing businesses in the UK is 20% less expensive.

Analyst TechMarketView also observed this by pointing out some of the largest UK tech businesses which have already been taken over.

“If Aveva is taken fully private and the merger of Avast with NortonLifeLock goes ahead, the FTSE 100 will be left with just one software and IT services company,” warned TechMarketView director Tania Wilson.

The British government has been taking more of an interest in foreign takeovers of UK tech companies. The government has been investigating under the auspice of National Security and Investment. NSIA allows the government to block or reverse deals considered against the national interest.

Instances include the French telco tycoon Patric Drahi’s increasing holding of BT stock, a Chinese entity’s purchase of New report Water Fab, and SoftBank’s threat to participate in the IPO.

However, on Schneider taking over Aveva, the British government has not made any move so far despite the hot discussions going on in the UK.